Some may see lower rates under Obama health law

OLYMPIA — Some Washington state residents may see lower insurance premiums under President Barack Obama’s health care law, with proposed plans released May 14 countering concerns expressed by the insurance industry a year ago.

Under the rate proposals submitted by insurance companies, rates vary dramatically among the types of plans and across age ranges. When compared to similar existing plans, one person may see higher premiums while another may see lower monthly payments.

Premera Blue Cross currently offers individual plans for 21-year-old non-smokers at a monthly cost of $325, with a deductible of $1,800. In the exchange, that same person in King County could purchase a similar Premera plan with a lower deductible at a rate of $276 — a decrease of 15 percent.

That’s a major contrast to past comments by Jeffrey Roe, the executive vice president at Premera Blue Cross, who warned last year that he expected individual premiums to go up 50 percent to 70 percent under the Obama law. Eric Earling, a spokesman for Premera, said Tuesday that Roe’s previous comments were a very preliminary estimate before the federal government provided guidance that clarified a range of regulatory rules.

Earling also said the current Premera plans are very small and serve a less-healthy population that has been in the system for a while. He pointed out that the company’s LifeWise plans were the most popular products and better to compare.

One of the most popular plans in the state is a basic LifeWise plan that covers essentials with a deductible of nearly $2,000. Under that plan, a 45-year-old non-smoker in King County currently pays $369 a month. Under a LifeWise plan with a similar deductible in the exchange, that would move down slightly to $368 a month, and the person would gain coverage for prescription drugs and maternity care. A smoker in the same circumstances would see monthly rates drop from $427 to $396.

The rates can vary dramatically. A non-smoker under the age of 21 in King County would currently pay $160 under the same LifeWise plan. That would move up slightly to $162 in the exchange. But someone who is 21 would see a jump from $160 to $255 — an increase of 59 percent.

“Each customer’s experience is really going to vary because these are entirely new products,” Earling said.

Under the Obama health law, some individuals may also qualify for federal subsidies to help cover the cost of insurance. LifeWise currently doesn’t offer any plans with a deductible under $1,800. Under the exchange, it will offer plans with a $500 deductible.

Observers expected some rate increases in part because the health care law requires coverage for things such as prescriptions and maternity care that aren’t typically covered. Stephanie Marquis, a spokeswoman at the state Office of the Insurance Commissioner, said insurance buyers are going to get a lot more for their money.

Gov. Jay Inslee said he’s excited by the rate proposals.

“These insurance plans will be a better deal for Washington residents,” Inslee said.

Correction: In a story May 14 about insurance premiums, the Associated Press, relying on information provided by the Washington state Office of the Insurance Commissioner, reported erroneously the premiums for an insurance plan. The $162 rate is for people under the age of 21, not for 21-year-olds. The story has been corrected